SINGAPORE: The reduction in rebates for car owners who scrap their vehicles early is unlikely to significantly affect decisions on whether to renew Certificates of Entitlement (COEs), Acting Minister for Transport Jeffrey Siow said on Wednesday (Mar 4).
He was responding to parliamentary questions on the revised Preferential Additional Registration Fee (PARF) rebates, including whether it would affect car prices and demand, and whether studies had been conducted.
Mr Siow said the PARF rebate was meant to keep the vehicle population in Singapore younger, safer and less pollutive. The rebate is given to those who scrapped their cars before the 10-year COE ran out.
With electric vehicles becoming more popular, less incentive is needed to encourage early deregistration, he added.
The rebates were reduced by 45 percentage points and are now capped at S$30,000 (US$23,000). Owners could previously receive rebates of between 50 per cent and 75 per cent, capped at S$60,000.
"We do not expect these changes to affect COE renewal behaviour significantly," said Mr Siow.
At the first COE bidding exercise after the rebates were revised, prices were largely unmoved. Premiums for more powerful cars in Category B fell the most, dropping 5.3 per cent and sliding below the premium for smaller cars in Category A.
Some market observers said they expected COE prices to fall further, but many buyers may have already signed a sales contract and paid a substantial deposit.
Analysts previously told CNA that luxury cars would feel the effect of the changes more, because the PARF rebate is calculated based on the Additional Registration Fee (ARF) paid by a car owner, which is pegged to the vehicle's open market value.
That means a more expensive car with a COE purchased before the rebates were revised would be eligible for a much higher rebate than the same car with a COE purchased after the changes kicked in.
"Fewer than 2,000 car buyers with committed purchases are estimated to be affected," said Mr Siow. "These include mostly buyers of higher-end internal combustion engine cars."
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He was responding to parliamentary questions on the revised Preferential Additional Registration Fee (PARF) rebates, including whether it would affect car prices and demand, and whether studies had been conducted.
Mr Siow said the PARF rebate was meant to keep the vehicle population in Singapore younger, safer and less pollutive. The rebate is given to those who scrapped their cars before the 10-year COE ran out.
With electric vehicles becoming more popular, less incentive is needed to encourage early deregistration, he added.
The rebates were reduced by 45 percentage points and are now capped at S$30,000 (US$23,000). Owners could previously receive rebates of between 50 per cent and 75 per cent, capped at S$60,000.
"We do not expect these changes to affect COE renewal behaviour significantly," said Mr Siow.
At the first COE bidding exercise after the rebates were revised, prices were largely unmoved. Premiums for more powerful cars in Category B fell the most, dropping 5.3 per cent and sliding below the premium for smaller cars in Category A.
Some market observers said they expected COE prices to fall further, but many buyers may have already signed a sales contract and paid a substantial deposit.
Analysts previously told CNA that luxury cars would feel the effect of the changes more, because the PARF rebate is calculated based on the Additional Registration Fee (ARF) paid by a car owner, which is pegged to the vehicle's open market value.
That means a more expensive car with a COE purchased before the rebates were revised would be eligible for a much higher rebate than the same car with a COE purchased after the changes kicked in.
"Fewer than 2,000 car buyers with committed purchases are estimated to be affected," said Mr Siow. "These include mostly buyers of higher-end internal combustion engine cars."
Continue reading...